What are the opportunities for decarbonising the supply chain?

March 18, 2024

Decarbonising the supply chain is a must for the agri-food sector in the context of climate change and high energy costs. SIAL Paris innovation will look at solutions.

The agri-food sector remains one of the largest sources for economic wealth in Europe generating employment and exports while being a factor of innovation and social responsability.

High energy prices are further pushing to accelerate decarbonising in the agri-food industry. In its short-term outlook report in autumn 2023, the DG Agriculture and rural development of the European Commission sees continuous high prices for energy sources. Based on Standard&Poos (S&P) Global forecasts, projections for Brent crude oil prices are reducing from a peak of approximately €104/bbl in Q2 2022 to approximately €74/bbl. However they are projected to reach approximately €79/bbl in Q4 2024 due to the recent OPEC+ supply cuts. Regarding natural gas, S&P Global September projections depicted an increase in prices with the winter season.

Due to climate change and a general rise in global temperatures, agri-food companies need to rethink their way of supplying their goods and adopt decarbonising practices. Climate change and issues around sustainability are two of the key drivers for innovation in the agri-food sector.

Decarbonising the supply chain should not only be considered only a constraint for companies, including SMEs as it also represents a ground for opportunities. How can transport and goods flows be made more sustainable? What are the benefits in terms of image and competitiveness?

There are several ways in which the agri-food sector can reduce the carbon footprint of its supply chain. Optimising logistics plans and looking at innovative ideas and concepts are at the heart of SIAL Paris. The show has long championed start-ups, providing enhanced visibility to a wide range of young and growing French and international companies.

Rationalising flows, optimising transport plans, pooling shipments by mutualising resources or favouring multi-modal solutions are all ways of limiting the number of kilometres travelled for goods. New management tools in the supply chain are today available to help decarbonising the sector. There are also increasing incentives provided by public authorities to re-localise supplies and production as much as possible to limit distances. The development of short distribution channels is a key trend, opening up opportunities for the entire agri-food sector.

What are the opportunities for decarbonising the supply chain?
The SIAL Innovation area (Photo: SIAL Paris)

SIAL brings solutions for decarbonising the agri-food supply chain

Working on new connectivity from point A to point B is one solution. But also looking at integrating new greener technologies is another important part of the solution to a cleaner agri-food sector. Such as the use of low-emission vehicles, which are a major driver for decarbonising the industry. The use of electric, bio-NGV or hydrogen-powered vehicles for road transport, rail and river transport for long distances should be integrated into development strategies -particularly when there is a need to renew transportation fleets. According to experts, although there are still few “green vehicles” in logistics, their share is set to rise rapidly between now and 2030.

In addition the integration of cleaner vehicles, solutions must be found to have cleaner practices to reduce the carbon footprint of logistics. Companies need to encourage eco-driving practices for their drivers, using geolocation tools to improve the fluidity of operations; digitalising order management ; looking at less energy-intensive cold chains or favouring lighter packaging among others. SIAL Talks is also a major meeting place to discuss the solutions of a decarbonised agricultural sector. The platform is a forum for top-level international experts, with the intervention of many actors of the distribution, food-processing and the catering industry.

SIAL Talks and Innovation 2024 will be again a place to learn more about sustainable practices, which can be simple to put in place. The entire agri-food sector has an educational role to play with their logistics service providers. It is also one of the objectives of SIAL Paris 2024.

(Top photo credit: SIAL Paris)

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